I heard the news Monday morning, before the sun had risen. Lehman Brothers Holdings, the fourth largest investment firm in the United States, had filed for Chapter 11 bankruptcy protection and Merrill Lynch, itself facing financial uncertainties, allowed itself to be acquired by Bank of America.

Fallout from the subprime mortgage crisis.

Later in the morning came news that AIG, the insurance giant, needed to borrow USD 20 billion (yes, with a B) to fund its day-to-day operations, and in essence, buy some time while it works on options to stabilize its fiscal footing.

More fallout from the subprime fiasco.

This came less than two weeks after the U.S. government took over Fannie Mae and Freddie Mac, the two mortgage giants, as they teetered at the financial abyss, and roughly six months after the Federal Reserve brokered the sale of Bear Stearns to JPMorgan Chase.

It’s possible that government efforts to plug holes and bail water will keep the economy afloat, but the ongong crisis might have been avoided or better contained if repairs had been made many seasons ago.

Earlier this summer, financial markets seemed to have become less volatile. Perhaps it was just the eye of the hurricane passing through.

Perhaps the markets simply haven’t hit bottom yet. Let’s hope that happens soon, and economies can begin to resurface. Let’s also hope they don’t get mired in the muck at the bottom.